Kidder Company began its operations on March 31 of the current year. Projected m
ID: 2420615 • Letter: K
Question
Kidder Company began its operations on March 31 of the current year. Projected manufacturing costs for the first three months of business are $156,551, $192,703, and $205,599, respectively, for April, May, and June. Depreciation, insurance, and property taxes represent $28,918 of the estimated monthly manufacturing costs. Insurance was paid on March 31, and property taxes will be paid in November. Three-fourths of the remainder of the manufacturing costs are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month. What are the cash payments for manufacturing in the month of June?
Select the correct answer.
$154,747 $173,457 $95,725 $156,551Explanation / Answer
Cash Manufacturing Costs in June (All amounts in $) Projections 205599 Less : Depreciation, Insurance and Property Taxes 28918 Actual Cash Projections 176681 Cash payment from May Projection 40946.25 ($ 192,703 - $ 28,918) /4 Cash payment from June Projection 132510.8 ( $ 176, 681 X 3 / 4) Total Cash Manufacturing Payments 173457 in the month of June
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